Bicoastal Cities Top List of Most Expensive Streets for Office Rents

Bicoastal Cities Top List of Most Expensive Streets for Office Rents

09:00 EDT Monday, September 30, 2013

San Francisco area and New York City top JLL's list of Most Expensive Streets

CHICAGO, Sept. 30, 2013 /PRNewswire/ -- What city comes top of mind when you think of high rent ? for both residential and office space? New York City? You might be surprised to learn the country's Most Expensive Street for office space is in a San Francisco suburb, according to a research study released by Jones Lang LaSalle. The recent study of 40 office markets across the United States reveals the list of most expensive streets* for office space in 2013, a follow-up to the study's launch in 2011.

(Photo: http://photos.prnewswire.com/prnh/20130930/CL82249-INFO )

Sand Hill Road in Menlo Park, Calif. (San Francisco Peninsula market), remains number one on the list with average rents reaching almost $111 per square foot (p.s.f.), New York City's tony Fifth Avenue, once again holding the number two spot, is the most expensive central business district street in the U.S. with average rents of approximately $102 p.s.f. Northern California's University Avenue in Silicon Valley takes the number three spot with average rents of about $95 p.s.f. Nationally, rental rates on the most expensive streets increased on average 10.9 percent since 2011 as the recovery moves forward, but also due to a lack of new construction leading to supply constraints as well as growth in the tech and energy industries in particular.

Reflecting the tech industry's growth, the San Francisco Bay area holds three spots in the top-10 rankings ? more than any other office market. California Street in the city of San Francisco moves up several notches to number six with a 45.3 percent increase to $62 p.s.f. placing it above Boston's Boylston Street for the first time, (and in the number one and three spot are Sand Hill Road and University Avenue). For Houston and Dallas, the energy sector is driving up rents on streets Louisiana Street and McKinney Avenue, which have experienced rent growth of 11.8 and 5.4 percent, respectively.

Also notable in this year's results; vacancy rates are falling fast on streets in many markets hit worst by the recession. These include Brickell Avenue (Miami), Peachtree Street (Atlanta), Fayetteville Street (Raleigh), and Boy Scout Boulevard (Tampa). Also illustrating an improving economy, single-digit vacancies were achieved by 14 streets in the rankings. Midwestern markets remain the most affordable; the most expensive street is Chicago's Wacker Drive, where a tenant can expect to pay $36 p.s.f.

"This year's results are particularly interesting because, not only do they demonstrate the standard real estate rule that location is everything, but they also reflect the overall office space demand trend in the U.S.," said John Sikaitis, Managing Director of Office Research at Jones Lang LaSalle. "We are seeing a slight uptick in occupancy rates as a result of the rate of business growth in the economy combined with a lack of new development."

The Top 10 Most Expensive U.S. Streets for Office Space:

1. Sand Hill Road, Menlo Park, Calif., $111.00 p.s.f. (-2.5%)

Historically the most expensive area in Silicon Valley, Sand Hill Road has deep roots with the venture capital community and houses the top VC firms in the greater Bay Area.

2. Fifth Avenue, Midtown Manhattan, NYC, $102.00 p.s.f. (+5.0)

Consistently ranked among the most expensive shopping streets in the world, Fifth Avenue is also home to numerous hedge funds looking for top-quality space in Midtown and willing to pay more for those coveted office locations with their unparalleled amenities.

3. University Avenue, Silicon Valley, Calif., $95.00 p.s.f. (+14.1%)

Located in Downtown Palo Alto, University Avenue is known for its vibrant startup community, as its proximity to Stanford University makes it an ideal location for recruiting top young talent.

4. Greenwich Avenue, Greenwich, Conn., $93.00 p.s.f. (+3.4%)

Greenwich Avenue competes with the best commercial real estate, leveraging its rich history preserved through older buildings. Top-shelf retail establishments dot the historically-rich corridor, from the top of the Avenue down through the transit center. Hedge funds and financial services firms occupy the majority of office space, with many top executives only steps from their homes. Premier office buildings offer close proximity to train, and command rents as high as $100 p.s.f.

5. Pennsylvania Avenue, Washington, DC $76.00 p.s.f. (-5.5%)

Despite slower overall market conditions in recent quarters, Pennsylvania Avenue has continued to experience rent premiums to the rest of the market. Known as "America's Main Street," Pennsylvania Avenue is home to many firms wanting close proximity to Washington's two main points of power, the White House to the west and the Capitol to the east. A big growth area in tenant demand in recent years has stemmed from the government affairs sector of corporate America.

6. California Street, San Francisco: $62.10 p.s.f. (+43.9%)

The main street of the city's North Financial District, California Street, is known for its historic cable car route, broadness and high-priced real estate. Growth in tech and associated industries, along with limited new supply, have pushed rents up by almost half over the past two years.

7. Boylston Street, Boston: $60.20 p.s.f. (+14.3%)

Boylston Street runs through two of Boston's most prestigious areas, Back Bay and the Financial District. It is home to numerous landmarks, Trophy office buildings and high-end retail, as well as some of the city's most distinctive skyscrapers.

8. Avenue of the Stars, Los Angeles: $60.12 p.s.f. (+1.9%)

The thoroughfare through the highly desirable Century City market, Avenue of the Stars is home to many prominent legal and financial service firms and talent firms, as well as the largest cluster of Class A Trophy assets on the Westside.

9. Royal Palm Way, West Palm Beach: $58.52 p.s.f. (+0.9%)

Royal Palm Way is dubbed "Banker's Row" due to the concentration of wealth management and financial services firms, catering to the wealthy residents on Palm Beach Island.

10. Newport Center Drive, Orange County $50.06 p.s.f. (+4.3%)

Sitting on a bluff overlooking the Pacific Ocean, Newport Center Drive is a 1.3 mile ring that encompasses the Fashion Island retail center. World class dining and retail amenities along with ocean view suites and access to posh residential neighborhoods make Newport Center Drive one of the most premiere places to rent office space in Southern California.

2013 U.S.s Most Expensive Streets for Office Space**:

Rank

Street

Market

2013 Average full service rent on street ($ p.s.f.)

2013Top fullservice renton street ($ p.s.f.)

Market averagerent ($ p.s.f.)

Differencefrom street average to market ($ p.s.f.)

1

Sand Hill Road

San Francisco Peninsula

$110.76

$126.00

$75.96

$34.80

2

Fifth Avenue

New York

$102.02

$141.00

$60.39

$41.63

3

University Avenue

Silicon Valley

$94.92

$93.00

$82.26

$12.66

4

Greenwich Avenue

Fairfield County

$92.96

$100.00

$37.42

$55.54

5

Pennsylvania Avenue

Washington, DC

$75.83

$83.00

$35.69

$40.14

6

California Street

San Francisco

$62.10

$95.00

$54.64

$7.46

7

Boylston Street

Boston

$60.20

$70.22

$29.56

$30.64

8

Avenue of the Stars

Los Angeles

$60.12

$66.00

$32.22

$27.90

9

Royal Palm Way

West Palm Beach

$58.52

$70.75

$27.15

$31.37

10

Newport Center Drive

Orange County

$50.06

$54.00

$25.67

$24.39

11

El Camino Real

San Diego

$43.32

$46.80

$25.92

$17.40

12

Congress Avenue

Austin

$42.04

$52.23

$27.89

$14.15

13

Arch Street

Philadelphia

$40.16

$45.00

$24.15

$16.01

14

Brickell Avenue

Miami

$39.09

$60.00

$31.41

$7.68

15

Union Street

Seattle

$38.92

$50.00

$30.28

$8.64

17

Louisiana Street

Houston

$38.82

$45.86

$36.26

$2.56

16

McKinney Avenue

Dallas

$38.55

$40.10

$20.85

$17.70

18

NW Couch Street

Portland

$37.00

$37.25

$20.86

$16.14

19

East Las Olas Boulevard

Fort Lauderdale

$36.84

$44.50

$26.20

$10.64

20

Wacker Drive

Chicago

$36.62

$53.04

$27.40

$9.22

21

Campus Drive

New Jersey

$35.65

$38.50

$24.57

$11.08

22

Broadway

Oakland-East Bay

$33.96

$36.00

$31.80

$2.16

23

17th Street

Denver

$32.78

$39.31

$22.67

$10.11

24

Capitol Mall

Sacramento

$32.25

$39.00

$22.08

$10.17

25

Nicollet Mall

Minneapolis

$30.60

$38.17

$24.45

$6.15

26

Old Woodward Avenue

Detroit

$30.00

$35.00

$18.60

$11.40

27

Boy Scout Boulevard

Tampa Bay

$29.81

$32.00

$24.42

$5.39

28

Peachtree Street

Atlanta

$29.80

$36.40

$20.99

$8.81

29

Wisconsin Avenue

Milwaukee

$28.90

$29.40

$19.39

$9.51

30

Forsyth Boulevard

St. Louis

$28.06

$32.50

$19.74

$8.32

31

Grant Street

Pittsburgh

$28.00

$33.00

$22.24

$5.76

32

Orange Avenue

Orlando

$26.73

$30.00

$22.89

$3.84

33

Pratt Street

Baltimore

$26.37

$30.50

$22.15

$4.22

34

Camelback Road

Phoenix

$26.19

$33.00

$20.23

$5.96

35

Nationwide Boulevard

Columbus

$26.00

$30.00

$17.50

$8.50

36

Tryon Street

Charlotte

$25.38

$32.00

$21.33

$4.05

37

Montomgery Road

Cincinnati

$25.00

$28.00

$19.38

$5.62

38

Public Square

Cleveland

$25.00

$29.00

$19.63

$5.37

39

Monument Circle

Indianapolis

$23.51

$27.00

$17.15

$6.36

40

East Cary Street

Richmond

$23.21

$26.50

$20.64

$2.57

41

Fayetteville Street

Raleigh-Durham

$22.87

$25.00

$21.85

$1.02

42

Deerwood Park Boulevard

Jacksonville

$20.88

$21.50

$17.07

$3.81

2011 North America's Most Expensive Streets for Office Space**:

Rank

Street

Market

Average full service rent on the street

Top full service rent on the street

Market average rent (Metro area)

Difference from market average to street average

1

Sand Hill Road

Menlo Park, Calif.

$113.64

$198.00

$54.00

110.4%

2

Fifth Avenue

Midtown Manhattan, NYC

$97.14

$141.00

$53.49

81.6%

3

Greenwich Avenue

Fairfield County-Greenwich

$89.86

$98.00

$32.19

179.2%

4

University Avenue

Silicon Valley

$83.16

$89.40

$67.44

23.3%

5

Pennsylvania Avenue

Washington, DC

$80.25

$83.00

$53.48

50.1%

6

Avenue of the Stars

Los Angeles

$59.00

$66.00

$47.68

23.7%

7

Royal Palm Way

Palm Beach, Fla.

$57.99

$71.00

$27.49

110.9%

8

Boylston Street

Boston

$52.65

$65.00

$29.23

80.1%

9

Bay Street

Toronto (Canada)

$52.09

$78.19

$28.78

81.0%

10

Albert Street

Ottawa (Canada)

$49.94

$54.19

$30.01

66.4%

11

Burred Street

Vancouver (Canada)

$48.88

$61.80

$32.21

51.8%

12

Newport Center Drive

Orange County

$48.00

$51.48

$23.08

108.0%

13

Third Avenue

Calgary (Canada)

$47.51

$52.97

$32.70

45.3%

14

California Street

San Francisco

$43.16

$82.00

$40.06

7.7%

15

McGill College

Montreal (Canada)

$41.05

$53.39

$26.02

57.8%

16

El Camino Real

San Diego

$39.72

$46.80

$25.80

54.0%

17

Wacker Drive

Chicago

$39.40

$55.30

$26.81

47.0%

18

East Las Olas Boulevard

Fort Lauderdale

$38.96

$43.27

$28.16

38.4%

19

101 Street NW

Edmonton (Canada)

$38.82

$44.95

$28.99

33.9%

20

Campus Drive

Northern N.J.

$38.00

$38.00

$27.99

35.8%

21

Congress Avenue

Austin

$36.06

$49.19

$25.65

40.6%

22

Brickell Avenue

Miami

$35.37

$60.00

$30.81

14.8%

23

Louisiana Street

Houston

$35.15

$46.10

$33.37

5.3%

24

McKinney Avenue

Dallas

$34.38

$40.00

$20.28

69.5%

25

Upper Walter Street

Halifax (Canada)

$33.65

$34.31

$26.30

27.9%

26

Market Street

Philadelphia

$31.74

$43.52

$26.08

21.7%

27

17th Street

Denver

$30.72

$38.85

$20.84

47.4%

28

Camelback Road

Phoenix

$29.79

$35.00

$21.50

38.6%

29

Boy Scout Boulevard

Tampa Bay

$29.22

$30.00

$21.08

38.6%

30

Forsyth Boulevard

St. Louis

$28.07

$32.50

$20.23

38.8%

31

Old Woodward

Detroit

$26.91

$36.55

$19.84

35.6%

32

Pratt Street

Baltimore

$26.73

$30.50

$22.40

19.3%

33

Sonterra Boulevard

San Antonio,TX

$25.16

$28.50

$19.69

27.8%

34

East Cary Street

Richmond, Va.

$24.38

$26.50

$17.70

37.7%

35

Grant Street

Pittsburgh

$24.19

$31.00

$20.11

20.3%

36

Montgomery Road

Cincinnati

$24.15

$26.23

$16.06

50.4%

37

Orange Avenue

Orlando

$23.18

$29.00

$20.73

11.8%

38

Peachtree Street

Atlanta

$22.91

$33.50

$20.00

14.6%

39

Public Square

Cleveland

$20.39

$29.64

$17.57

16.1%

40

Nicollet Mall

Minneapolis

$19.98

$23.49

$15.82

26.3%

* The rental figures reflect the highest office rents in each individual market.

** The rental information is Jones Lang LaSalle's proprietary data and quarterly review of the top 40 office markets across the United States. This data is for Q2 2013.

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